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New Porter budget calls for a 3.1 percent spending hike

MIDDLEBURY — The Green Mountain Care Board (GMCB) on Wednesday, Aug. 26, was scheduled to review a proposed fiscal year 2016 Porter Medical Center (PMC) budget of $77,254,719, representing a 3.1 percent increase in spending that among other things reflects a bigger commitment in helping opiate addicts, an ongoing investment in health care technology, and the refinancing of the organization’s debt at a more favorable rate.
PMC is requesting from the GMCB a budget-to-budget net revenue increase of 3.3 percent, which is well within the board’s 3.6-percent guideline for the state’s hospitals. Net patient revenue includes payments hospitals receive from patients, government, and insurers to pay for patient care.
Porter is requesting permission for a rate increase of 5.3 percent for the services it dispenses, though officials said it will not realize that amount largely due to the fact that federal reimbursement rates for Medicaid and Medicare insurance programs don’t nearly cover the actual cost of the procedures provided at the hospital.
“We have presented a budget that we believe is a stable budget that is balanced, in that it meets guidelines, provides some additional balance sheet growth and supports our current objectives,” said Steve Ciampa, PMC’s vice president of finance and CFO. “It also prepares us for new initiatives and objectives moving forward.”
The hospital is projecting around 2,048 patient visits during the upcoming fiscal year, up by around 20 from this year.
“A key point of emphasis (to the GMCB) will be continued (patient) volume and stability,” Ciampa said. “Another key point of emphasis is our ability to continually strengthen our balance sheet, addressing significant capital needs over the last couple of years.”
Lynn Boggs, recently hired as the new president of PMC, gave her stamp of approval to the budget proposal while noting the future challenges that Porter and other Vermont hospitals are facing: Transitioning to a system in which the success of a health care network is measured based on its ability to keep patients out of hospitals and receiving acute care.
 “We (at Porter) are doing a great job taking care of people and keeping them well; the downside is, we are seeing the effect of that on your traditional in-patient platform,” Boggs said. “What we want to happen is we want to keep people well, and that’s where the global budgeting strategy for Vermont is going to take us. But in the meantime, we are not there yet, and we are still getting paid for ‘sick people.’
 “We are kind of in this transition state that is risky and difficult to manage,” she added.
Along with explaining their fiscal year 2016 budget proposal, Porter officials on Wednesday updated the GMCB about other PMC news. They, of course, announced the hiring of new PMC President Lynn Boggs and reported the organization continues to search for a new vice president of Porter Practice Management to succeed Jean Cotner, who with her family has moved to Florida.
Also, PMC has just completed implementation of its electronic medical records system within the hospital and the organization’s 12 affiliated physicians’ practices.
PMC officials also reported on some key initiatives in the offing for next year. They include greater transparency on the health care charges, and continued participation in an Accountable Care Organization made up of PMC and other area providers — such as the Counseling Service of Addison County — that are committed to providing services more efficiently and at a lower cost.
Porter Medical Center was able to refinance its debt at what officials called “a much more favorable and long-term interest rate” through a 10-year note. The debt is associated with payback on some major projects, including construction of the birthing center in 2005, and Helen Porter Healthcare & Rehabilitation Center during the early 1990s.
Those two major loans were at an interest rate that was higher than what Porter could obtain in today’s market, officials explained.
The proposed PMC budget also reflects some new health care commitments the organization is extending into next year. Those include expansion of the new suboxone program offered through Bristol Internal Medicine. The program helps area residents battling opiate addiction.
“I would characterize it as a very responsible budget that fits within the guidelines of the GMCB and which continues to support the necessary patient care services that Porter provides,” Porter spokesman Ron Hallman said. “It also allows for equipment replacement and other projects so that we maintain our central infrastructure.”
Reporter John Flowers is at johnf@addisonindependent.com.

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